CLA-2 RR:CR:TE 965146 mbg
Stacy L. Weinberg, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
245 Park Avenue
33rd Floor
New York, NY 10167-3397
RE: African Growth and Opportunity Act; women’s knitted pants
Dear Ms. Weinberg:
This is in response to your letter of June 11, 2001, on behalf of your client, Mast Industries, requesting a binding ruling on the eligibility of women’s pants for preferential treatment under the African Growth and Opportunity Act (“AGOA”).
FACTS:
Mast Industries plans to import from Mauritius a pair of women’s knitted pants classified in subheading 6104.63.2006, of the Harmonized Tariff Schedule of the United States Annotated ("HTSUSA").
The subject pants, style number 011916, are constructed of 70 percent polyester, 25 percent rayon and 5 percent spandex knit fabric. The pants features a 1 ½ centimeter elastic waistband and a hemmed bottom. The garment reaches from the waist to the ankles in length.
You have stated in your original submission that the pants will be cut and sewn in Mauritius from fabric made in the “AGOA region” and would fall under the “regional fabric provision.” Upon request, you have clarified that the pants are constructed from fabric made in South Africa from yarn manufactured in South Africa. The elastic waistband is said to be of “foreign origin” but constitutes less than 25 percent of the value of the finished garment.
ISSUE:
Whether the subject apparel is eligible for preferential treatment under AGOA?
LAW AND ANALYSIS:
Title I of the Trade and Development Act of 2000, Pub. L 106-200, 114 Stat. 251, May 18, 2000, referred to as the African Growth and Opportunity Act (“AGOA”), seeks to promote trade opportunities between the U.S. and the countries of sub-Saharan Africa. The AGOA provides for the extension of duty-free treatment under the GSP to non-textile articles normally excluded from GSP duty-free treatment that are not import sensitive; and the entry of specific textile and apparel articles free of duty. In order to implement the AGOA, Customs issued Interim Regulations in T.D. 00-67, 65 Fed. Reg. 59668, which became effective October 1, 2000. With regard to the textile and apparel provisions, the law became effective on October 1, 2000, and shall remain in effect through September 30, 2008. See Sec. 112(f), AGOA.
The enhanced trade benefits provided by the AGOA are available to eligible textile and apparel articles imported directly from a country (1) that is designated as a beneficiary sub-Saharan African country and (2) which the U.S. Trade Representative (“USTR”) has determined by a proclamation published in the Federal Register has satisfied the requirements of the AGOA and therefore should be afforded the tariff treatment authorized in such Act. Such countries shall be enumerated in U.S. Note 1, Subchapter XIX, Chapter 98, HTSUS, whenever the USTR issues a Federal Register notice as described herein. See Presidential Proclamation 7350, Annex, dated October 2, 2000, 65 Fed. Reg. 59321.
The Republic of South Africa was designated as a beneficiary sub-Saharan African country under AGOA by Presidential Proclamation 7350. The USTR issued a determination finding that South Africa has adopted an effective visa system and related procedures to prevent unlawful transshipment and the use of counterfeit documents in connection with shipments of textile and apparel articles and has implemented and follows, or is making substantial progress toward implementing and following, the customs procedures required by the AGOA, effective March 7, 2001. See 66 Fed. Reg. 14425, dated March 12, 2001.
I. Applicable Apparel Provisions under AGOA
Subheading 9819.11.09, HTSUS, provides as follows:
Apparel articles wholly assembled in one or more such countries from fabric wholly formed in one or more such countries from yarn originating in either the United States or one or more such countries (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 and are wholly formed and cut in one or more such countries), subject to the provisions of U.S. Note 2 to this subchapter.
U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.09. U.S. Note 2(a) and (b), provide:
(a) Imports of apparel articles under subheadings 9819.11.09 and 9819.11.12 shall be limited, in the period beginning on the date announced in a notice published in a Federal Register by the United States Trade Representative and continuing through the close of September 30, 2001, to an aggregate quantity not to exceed 1.5 percent of the aggregate square meter equivalents of all apparel articles imported into the United States in the preceding 12-month period for which data are available. Of that aggregate quantity, an amount not to exceed 1 percent of such aggregate square meter equivalents shall be eligible to enter under such subheadings during the period beginning on the date announced in such Federal Register notice and continuing through the close of December 31, 2000. The remaining 0.5 percent of such aggregate square meter equivalents, together with any quantity remaining unfilled from the 1 percent eligible to enter prior to January 1, 2001, shall be eligible to enter under such subheadings during the period beginning on January 1, 2001 and continuing through the close of September 30, 2001.
(b) Such imports of apparel articles under subheadings 9819.11.09 and 9819.11.12 shall be limited, in each of the seven one-year periods beginning on October 1, 2001, to an aggregate quantity not to exceed the applicable percentage set forth herein of aggregate square meter equivalents of all apparel articles imported into the United States in the preceding 12-month period for which data are available:
12-Month Period Applicable Percentage
October 1, 2001 through September 30, 2002 1.7857
October 1, 2002 through September 30, 2003 2.0714
October 1, 2003 through September 30, 2004 2.3571
October 1, 2004 through September 30, 2005 2.6428
October 1, 2005 through September 30, 2006 2.9285
October 1, 2006 through September 30, 2007 3.2142
October 1, 2007 through September 30, 2008 3.5
In this case, the yarn is spun in South Africa, the fabric is wholly formed and cut in South Africa, and the apparel is wholly assembled in South Africa. As such, the garments would be entitled to be classified in subheading 9819.11.09, HTSUS, subject to the quantitative limits set forth in U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS. However, Customs must also consider the provisions applicable to the foreign findings and trimmings also incorporated into the garment.
II. Findings & Trimmings Requirements
Subchapter XIX, U.S. Note 3(a), HTSUSA, provides:
An article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains—
(i) findings and trimmings of foreign origin, if the value of such findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article[.]
Furthermore, Subchapter XIX, U.S. Note 3(b), HTUSUSA, provides:
For purposes of subdivision (a)(I) above, findings and trimmings eligible under such subdivision include sewing thread, hooks and eyes, snaps, buttons, “bow buds” decorative lace trim, elastic strips, and zippers, including zipper tapes and labels. Elastic strips are considered findings and trimmings only in they are each less than 2.54 cm in width and used in the production of brasseries. For purposes of articles described in subheading 9819.11.06, sewing thread shall not be considered to be findings or trimmings.
The Interim Regulations, regarding findings and trimmings further provide:
An article otherwise described under paragraph (a) of this section will not be ineligible for the preferential treatment referred to in [19 C.F.R.] § 10.211 because the article contains:
(A) Findings and trimmings of foreign origin, if the value of those findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article. For the purposes of this section “findings and trimmings” include, but are not limited to, hooks and eyes, snaps, buttons, ‘bow buds’, decorative lace, trim, elastic strips (but only if they are each less than 1 inch in width and are used in the production of brassieres), zippers (including zipper tapes), labels, and sewing thread except in the case of an article described in paragraph (a)(3) of this section.
See 19 C.F.R. §10.213(b)(1)(a)(i).
Therefore, in regard to the facts of this case, the subject pants classified in subheading 6104.63.2006, HTSUSA, are said to be cut and assembled in South Africa from fabrics produced in South Africa. For non-fabric components such as plastic, metal or wood, there is no requirement that these components be of a specified origin. The 1 ½ centimeter elastic waistband is of foreign origin in Style # 011916 and is considered to be a finding and trimming. However, as provided for in AGOA, the findings and trimmings provision does not apply to the elastic waistband used in the subject pants. Subchapter XIX, U.S. Note 3(b), HTUSUSA, only allows for a narrow use of elastic strips and specifically states that elastic strips are considered findings and trimmings “only if they are each less than 1 inch in width and are used in the production of brassieres.”
HOLDING:
The pants are ineligible for preferential treatment under the AGOA due to the inclusion of the elastic waistband which is excluded from the findings and trimmings provision.
The subject pants are classified in subheading 6104.63.2006, HTSUSA, which provides for “Trousers, bib and brace overalls, breeches and shorts: Of synthetic fibers: Other: Other: Trousers and breeches: Women’s: Containing 5 percent or more by weight of elastomeric yarn or rubber thread.” The general column one rate of duty is 28.6 percent ad valorem. The textile category number is 648.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.
The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to time of shipment, The Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division